Reid wants online sales tax on floor

A state online sales tax fix may leapfrog its way right to the Senate floor.

Majority Leader Harry Reid began the process late Tuesday that would allow the bill, known as the Marketplace Fairness Act, to come before the full chamber without first going through the Senate Finance Committee — whose leaders largely dislike the proposal.

Story Continued Below

A spokesman for Reid on Wednesday did not respond to a request for comment on whether Senate leaders will try to pass it through unanimous consent or hold the bill until a fuller floor debate is scheduled.

But the Senate could vote as early as next week on an online sales tax bill, a Senate Democratic aide told POLITICO.

Sen. Max Baucus (D-Mont.) railed against the measure during last month’s budget debate. He said at the time that he wanted to address the issue as part of comprehensive tax reform through the Senate Finance Committee. If Reid uses the so-called Rule 14 process, the legislation would again bypass the tax-writing committee.

“Sen. Baucus is discussing the issue with leadership and his colleagues on the committee. He still has the same concerns about how this will work for Montana businesses, which he expressed during debate on the floor last month. The current form of the bill still does not fully address concerns about how taxation would be addressed across state lines, especially when states have such different tax rules. It presents a huge burden for small businesses in Montana and across America,” a Senate Finance Committee aide told POLITICO.

When lawmakers held a test vote on the bill as part of this year’s budget debate, the online sales tax amendment drew a fiery exchange among supporters such as Sen. Dick Durbin (D-Ill.) and opponents such as Sen. Ron Wyden (D-Ore.) and Kelly Ayotte (R-N.H.). The amendment was adopted, 75-24, during the debate on the nonbinding budget resolution.

Rep. Peter Welch (D-Vt.) said a Senate vote is key for the legislation to pick up momentum in the House.

“They are taking the lead,” he told POLITICO. “If they follow through and actually pass it out of the Senate, their legislation will give us a big boost in the House. The House has so much else going on … so this micro issue needs Senate consideration.”